Understand Your Options Before Taking Short Sale Action

Understand Your Options Before Taking Short Sale Action

Many people do not understand the differences between foreclosure and a short sale. Are you a homeowner that has found it difficult to meet your monthly mortgage obligation? If so, you need to understand these two concepts prior to taking action. Some important actions that should be taken prior to making a decision are:

  • Contact your mortgage company and discuss your options
  • Meet with your local real estate consultant (preferably one who specializes in this area)
  • Educate yourself on the potential credit and tax consequences of releasing your home.

As a first step, let’s take a look at what these terms mean:

A Short Sale is when you come to an agreement with your mortgage company to accept less than what you own on your home. In most instances, you the owner need to be proactive in listing your home and selling for at or above what the bank agrees to accept.

A Foreclosure is when the bank takes the proactive legal action against the homeowner when they stop making their payments. In this instance, the deed to the house returns to the lender and allows them to sell the house for any price they can obtain.

What are the specifics of Short Sale vs Foreclosure?

In the case of a short sale, the home owner is given the opportunity to list the home on the market at the CURRENT market value, even if that value is less than what is owned by the mortgagee. At the time the home is listed, all marketing must clearly state that this is a short sale and the bank reserves the right to approve all contracts. A potential buyer is notified that the seller is not in a position to accept any offer without the consent of the mortgage holder. As a seller, you need to be aware that the bank has the option of waiting until several offers have been submitted prior to making any final decision to accept any proposal. Obviously, the bank would like to receive the bulk of the money they have invested in the property.

Why would a bank even consider a short sale? Foreclosures are expensive and if the bank can regain enough of the balance owed to eliminate the foreclosure process, they often come out ahead. Some of the fees incurred with a foreclosure are court fees, realtor fees, attorney fees and tax expenses. This makes a short sale more attractive in some instances.

Before you make any decisions on which choice is best in your specific situation, you will want to consult a real estate professional, your accountant and possibly a tax attorney. Myrtle Beach Short Sale Team specializes in short sales and can give you a good idea of what to expect. Some of the items we can provide for you are:

  • Current Market Value Of Your Home (this is not an appraisal but is based on what is happening in your neighborhood)
  • An estimate of the potential for your home to sell at a specified price
  • Manage the short sale transaction for you
  • Assist you with communicating with the bank
  • Assist with completion of all necessary forms and paperwork necessary for short sale

Your accountant and/or a tax attorney can provide you with advice on any tax consequences from the short sale of your home.

Always consult a professional prior to making any decision on your home. You invested your hard earned money into this home and you deserve to know your options.

Don’t wait until the foreclosure papers are served – it may be too late. Be proactive and give the specialists at Myrtle Beach Short Sales Team a call today.

JP Short Sale Team
854 Jason Blvd Unit G
Myrtle Beach, SC 25577
843-222-1926

Your Myrtle Beach Short Sale Team

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